lar mitigation or adaptation patterns may in fact lead to quite different ancillary impacts and quite different patterns of uncertainty in responses. Economic and regulatory interventions, for example, rarely operate in practice as well as is suggested by institution-free theories. Their effects depend on the cultural and institutional context of their implementation. Similarly, technological innovations are not readily adopted by all those who would benefit, and rates of adoption are sensitive to institutional variations. Thus, a research effort focused on institutional design issues can:

  • improve estimates of the costs and benefits (including those associated with nonmarket goods and services) of the various options for mitigating and adapting to climate change through interventions in the energy system;

  • improve integrated assessments of climate change by improving understanding of the likely outcomes of policy options; and

  • identify response options that might not otherwise be considered.

Such a research focus would also gather basic knowledge about the operation of environmental management institutions affecting the energy sector that might be transferable to the analysis of options for managing nonenergy environmental problems.


Focused research on institutional design for managing energy-related environmental problems is timely now for at least these reasons:

  • the U.S. commitment to greenhouse gas reduction requires careful analysis of a full range of energy policy options;

  • the USGCRP is moving ahead with economic analyses of some types of policy instruments, analyses that should be supplemented by institutional studies for greatest practical value;

  • analysts are increasingly recommending institutional approaches to managing these problems (e.g., creation of emissions trading permit regimes), making institutional analysis particularly timely; and

  • growing international communities of researchers who work on marketlike and other institutions for the management of common-pool resources can now be drawn into the analytical effort.


Research would address questions in the following areas:

  1. What is the potential for mitigating or adapting to global environmental

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